What is Charity Clarity?

Charity Clarity was founded with two simple aims: For charities, we want to highlight your good work and help you succeed. For donors, we want to make sure you have the right information to help you make a difference.

About Us: Idea behind Charity Clarity

The idea of CC was conceived a few years ago after the team saw the difficulty they and others faced in identifying the right charities which achieve social impact in the most effective manner. It is an initiative of EPG Strategic Communications Limited.

Our hypothesis

Charities, while well-meaning, sometimes lack transparency and have poor corporate governance. They also don’t have access to the full range of services that could improve their delivery, and save cost. Therefore, there must be a way of improving the level of governance.

How it all started – our initial research into faith-based charities

Census 2011 figures show there are 816,633 Hindus in Britain, compared to 2,706,066 Muslims and 263,346 Jews (a similar number to the Buddhist population). There are at least 30,000 registered faith-based charities, which count for just under 20% all registered charities, with a combined income of £8.2bn and 140,000 trustees. Of these, there are just under 400 charities (clearly) identifying themselves with the Hindu faith.

The report which looked at this found that the annual voluntary income for faith-based charities on a per capita basis was £30 per Hindu, but £78 per Muslim, and £788 per Jewish person. In other words, Hindus give far less to Hinduism-based charities than Muslims and Jews do to their faith charities.

In other words, Hindus give far less to Hinduism-based charities than Muslims and Jews do to their faith charities.

This is likely to be a significant underestimate, because:

there are significant donations in kind at Hindu temples that are excluded from this figure;

identifying a “Hindu” charity is difficult, as there are wildly varying estimates from the Charities Commission and others, with neither likely to have captured all the associated charities; and

community organisations may not be charities, but have other legal forms.

But there is a perception of lack of transparency with the use of funds at these organisations…

There is a perception that some of these organisations in Britain display a lack of transparency in how they spend donation monies and trading income. It is often not possible to find audited annual reports on the websites of temples, for example, and governance trails such as election nominations and results, as well as what monies are spent on. Lord Dolar Popat argues this here.

Well-intentioned donations can accidentally reward bad charities and punish good ones. This is why it is important to provide donors with the tools and resources they need to ensure their donations match their good intentions. This will drive optimal donor decisions.

…which is at least in part due to a lack of quality assurance process in the community.

Most donate at places of worship at major festivals in good faith, assuming their donations will be put to good use. While this may be true, it is difficult to verify because of a lack of quality assurance available as to the use of these funds.

Governance issues are manifested in several ways. One of the major avenues is the lack of engagement by young people in organising committees, which has been cited to us through earlier work several times. As a result, transition planning cannot occur and governance may slip further.

The establishment of a quality assurance process would not only provide donors with more comfort around the use of their monies, but would increase the efficiency of spending at the charities and drive up governance standards.

What work others have done on this

New Philanthropy Capital (NPC), one of the largest charity advisory firms in the UK, discovered that 20% of mainstream donors and 34% of high income donors would increase their overall giving if charities did a better job in the areas they care about: explaining how donations are used and providing evidence of impact.

The research shows that if charities communicate more effectively, they will build more rewarding relationships with donors. Work from the Asian Foundation for Philanthropy recently highlighted that the most likely deterrent to giving was a suspected lack of transparency. The New Economics Foundation (NEF) found that charities generally prioritise service delivery over performance management.

Testing our hypothesis

We wanted to test the above hypothesis before we did any work. So we conducted an online survey, aimed at young people across Britain and distributed it through several youth networks.

We obtained 78 responses. Most were 22-34 years old, equally split between male and female, with the largest contingent from the South-East of England. Our results are here.